TUESDAY MORNING'S TOP STORIES

By

AbbyDeveney

Pre-open moves

Stocks futures weakened after a key inflation report showed wholesale prices rose 1.9% in September, the biggest jump in 31 years. Markets were also digesting earnings from such heavyweights as IBM, United Technologies, 3M, and Merrill Lynch.

Global markets

Roche will ramp up production of bird-flu drug Tamiflu as Greece became the first E.U. member to confirm the virus, which has already been detected in Turkey and Romania. Japan's Nikkei was pressured again by Prime Minister Koizumi's visit to a controversial war shrine, sparking China and South Korea ire.

Goldman Sachs shifted its ratings in the semiconductor sector. The broker cut Texas Instruments, Inc.
TXN, -3.36%
to underperform from in line. It upgraded Entegris, Inc.
ENTG, -0.62%
to outperform from in line and raised its rating on Axcelis Technologies, Inc.
ACLS, -4.76%
to outperform from in line.

3M Co.
MMM, -1.96%
beat Wall Street's consensus expectations for the third quarter and increased its buyback authorization early Tuesday. The Dow component reported third-quarter earnings of $853 million, or $1.10 a share, up from a year-ago profit of $775 million, or 97 cents a share. The results reflect costs of 2 cents a share related to the Dow component's acquisition of CUNO Inc. Sales rose 8.3% in the three months ended Sept. 30 to $5.38 billion from $4.97 billion in the same period a year earlier. The average estimate of analysts polled by Thomson First Call was for a profit of $1.08 a share in the September period on revenue of $5.31 billion.

United Technologies Corp.
UTX, -0.81%
said third-quarter net income rose 18%, as all business segments delivered double-digit gains in operating profit. The Dow component posted earnings of $821 million, or 81 cents a share, up from $693 million, or 68 cents, earned in the same period last year. Quarterly revenue reached $10.91 billion from $9.34 billion, up 17%. Analysts, on average, had been looking for earnings of 79 cents a share on revenue of nearly $10.81 billion, according to estimates compiled by Thomson First Call.

Merrill Lynch
MER, -2.11%
reported a record quarterly profit for its third quarter, handily beating Wall Street analysts' estimates. The company earned $1.38 billion, or $1.40 a share, in the quarter, on revenue of $6.7 billion. Earnings per share were 51% ahead of year-ago levels and well ahead of analysts' average estimate of $1.18.

Diversified healthcare conglomerate Johnson & Johnson
JNJ, -1.56%
reported a 12% jump in third-quarter profits. J&J earned $2.6 billion, or 87 cents a share, compared with $2.3 billion, or 78 cents a share, for the same quarter last year. Last year's quarterly results included a $12 million after-tax charge related to the acquisition of Scott Lab Inc. Sales for the quarter increased 7% to $12.3 billion, up from $11.6 billion last year. A poll of analysts by Thomson First Call estimated J&J would earn 86 cents a share, on revenue of $12.5 billion

Refco Inc.
RFX, -2.09%
late Monday signed a memorandum of understanding to sell its futures brokerage to investors led by J.C. Flowers & Co. for $768 million. It also said in connection with the deal that Refco Inc. has filed for Chapter 11 bankruptcy protection. Its regulated units -- Refco LLC, Refco Overseas and Refco Singapore, and Refco Securities -- won't file for protection, it added.

Unisys Corp.
UIS, -0.66%
posted a preliminary third-quarter net loss of $54.3 million, or 16 cents a share, after taking a pretax charge of $10.7 million, or 2 cents a share, related to its note tender offer and a pretax pension charge of $44.2 million, or 9 cents a share. Excluding the pension charges, the net loss would have been $24.3 million, or 7 cents a share. Analysts had been expecting the company to report a loss of 17 cents a share.

Great Atlantic & Pacific Tea Co.
GAP, -0.88%
reported net income of $592 million, or $14.40 a share, for the second quarter ended Sept. 10, reversing a year-earlier loss of $64.2 million, or $1.67 a share. The regional grocery chain's quarterly sales came in at $2.17 billion, down from $2.49 billion, as U.S. comparable-store sales slipped 1.1%. In the latest quarter, A&P booked a gain of $919 million tied to the disposal of its Canadian operations as well as $152 million in charges.

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